CHAPTER 1 - INTRODUCTION

When one thinks of the productivity of a forest, the
first thing that comes to mind is timber. The production of timber is often
organized and highly visible, and the markets for wood are highly structured and
well established. Forests also produce a multitude of non-timber products,
however, including such diverse items as medicinal plants, dyes, mushrooms,
fruits, resins and saps, and raw materials that can be made into ropes, baskets,
mats, fences, clothes and many other consumer products.

Non-timber forest products (NTFPs)* have the potential to become substantial sources of
revenue, but in many communities they are underexploited. In some cases, people
make considerable use of the products, but their commercial value is low. One of
the difficulties for small-scale producers who seek to commercialize NTFPs is
that often the markets for these products are relatively complex compared to
those for timber and more traditional agriculture goods. Many NTFPs occupy
"niche" markets, which tend to be small and dispersed. in addition, there are
few established standards for NTFPs, and consumer preferences for products may
vary considerably depending on such factors as the type of market (tourist or
local) and the time of year. Prices for NTFPs vary from place to place as well
as over time. Buyers may impose different quality control standards. All of
these factors contribute to the complexity of NTFP markets.

Producers who are often specialists in harvesting or
manufacturing goods using forest resources may have limited experience in
marketing. They may not know how to obtain and make use of information that
would help them make informed decisions about what to sell, and where and when
to market their products in order to earn the maximum profits from their
efforts.

This field manual presents a systematic approach that
can be used by small-scale producers to gather information about markets for
NTFPs. A Marketing Information System (MIS) collects, analyses and communicates
information about markets and marketing. The kind of MIS described in this
manual can be managed by local people themselves. They determine what
information is needed, set up systems to gather the information, and decide how
and to whom the information will be communicated. The purpose of the MIS is to
improve people's access to marketing information for NTFPs and to train them in
its use. This, in turn, will help them make better decisions about the use of
local natural resources and increase the revenues they receive from these
products.

The development of the methodology used in this field
manual began in 1990 when the FAO's Forest, Trees and People Programme responded
to a request by the Philippine Government to help local people with the
marketing of community forestry products. In collaboration with local
communities, they developed the first locally-managed Marketing Information
System in Sta. Catalina, the Philippines. Recognizing the potential value of
such a system, FAO's Community Forestry Unit and Forest Products Division
decided to field test the approach in a variety of settings. MIS test sites were
established in two other locations in the Philippines, as well as in two
communities in Uganda, two places in the Solomon islands and a remote area of
Peru.

Examples from the Uganda and the Philippine experiences
will be presented in boxes throughout the manual to illustrate the issues raised
in the text. The box on p. 3 provides a brief introduction to the sites in these
two countries that will be discussed in greater depth in each chapter.
Occasional examples from other places where an MIS has been used will also be
cited. This manual summarizes the lessons of these various experiences while
recognizing that the approach will continue to be refined and improved by each
new group of users.

Many people contributed to the development of this
publication. The approach could never have been implemented without the great
efforts of Isabelita Austria in the Philippines who saw the project through from
its inception. Abwoli Banana extended the process, establishing two sites in
Uganda. Tom Hammett, FAO forestry products marketing specialist, supported the
setting up of the first Philippine MIS site and developing the methodology.
Important guidance was also given by FAO agroforestry specialist Susan Braatz
and by FAO forestry marketing specialist Leo Lintu. Lars Bjorklund and Anders
Sjoberg both provided helpful comments and perceptive advice. This document was
skilfully edited by Karen Schoonmaker Freudenberger.

AN INTRODUCTION TO THE MIS TEST SITES

The Philippines was the first country to test the
Marketing Information System. In 1991, activities began at the first site, Sta.
Catalina in Quezon Province. In 1993, the test programme was expanded to two
additional sites: Alion (in Bataan province) and Julita (in Aklan province). In
the Philippines, the implementation of the MIS has been supported by the
Department of Natural Resources (DENR), which has been involved in all stages of
the process.

The Philippine MIS participants were principally the
growers and collectors of various forest products. The first site in the
Philippines was Sta. Catalina, an upland village located some 150 km south of
Manila. The participants decided to monitor prices for seven products, including
banana, eggplant, ginger and coconut. Alien is located in a more agriculturally
developed region. It is also closer to Manila and hence enjoys access to larger
markets. Major commercial crops in the area are mango, coffee, banana, peanut
and cashew. In addition to setting up an MIS for monitoring in-season prices of
banana, peanut and citrus fruit in five markets, the users decided to monitor
prices of cashew nuts throughout the year and to learn more about processing
options for this product. Julita is a village on one of the smaller islands with
fewer marketing opportunities than either Sta. Catalina or Alion. Its principal
NTFPs are abaca (fiber used to make rope and cloth), ambulong palm leaves (used
for roofing) and copra. Their MIS was set up initially to provide information on
these products, but users later expanded it to include rice.

In Uganda, MIS activities were oriented to handicraft
traders involved in the marketing of locally made goods such as mats and baskets
to both area residents and tourists. The traders were particularly interested in
learning more about consumer preferences for different goods so that they could
target different markets more effectively. One of the Uganda sites was Mukono,
just 15 km from the capital Kampala. The Mokono group included more than 20
families and individuals. The smaller Masaka group (six families) operates about
130 km from the capital.

In both the Philippines and Uganda, the primary
participants in the MIS were women.

ABOUT THIS MANUAL

Purpose. The immediate
purpose of this manual is to help local groups establish a Marketing Information
System that is user-driven, flexible and responsive to local needs. The longer
term objective of the MIS, in most cases, will be to help people market their
NTFPs more effectively and increase their earnings from these activities.

Intended audience. This
manual is.written primarily for the facilitator who will work with a local
community to set up an MIS. The facilitator may be from the community or be an
extension worker, project staff person, government official or consultant. In
most cases, the facilitator will have some experience with marketing issues and
project management. The role of the facilitator will be to help the community
understand the potential of an MIS and to assist in planning and organizing
activities. He or she will also provide administrative support and training,
help with monitoring and evaluation and, where necessary, coordinate the funding
assistance needed to get the MIS under way. The facilitator will not generally
make decisions concerning the design and implementation of the MIS. This will be
the responsibility of local operators and users.

Community participation. The
activities described in this manual depend on the active participation of
community members in the design and implementation of the MIS. The MIS is
intended for people who grow, collect. process, sell or trade NTFPs. It is
critical that the local population and, in particular, the potential users of
MIS information, be involved with every step of planning and implementing the
MIS. The objective of this manual is to put in place an MIS that is "owned" by
the local community or a group within that community. Previous experience with
MIS implementation suggests that the earlier the community is involved in the
process of collecting information and planning the MIS, the greater its
participation and interest in the system will be once it gets under way.

Organization of the manual.
This manual takes the facilitator step-by-step through the design of an MIS.
After an initial introduction to the concepts of MIS (chapter 2), the next three
chapters take the reader through each of the steps in establishing an MIS.
Chapter 3 outlines the preliminary step in which the site is selected and the
participants are identified. Chapter 4 addresses the assessment step in which
information is gathered for the MIS design. Chapter 5 turns to the design step
in which critical decisions are made concerning the objectives and the structure
of the MIS. The final chapter (chapter 6) reviews some issues that commonly
arise in implementing an MIS and offers suggestions for resolving problems that
may occur.

Since the manual systematically follows the MIS
implementation process, it will probably make the most sense if the sections are
read in order. However, communities will be at different stages in defining
their needs and in organizing their members. Certain communities may be able to
pass very quickly through some steps in the process if, for example, they are
already very clear on what the objectives for their MIS should be. Others will
want to take more time with each of the suggested activities.

The examples given in the text boxes are simply
illustrations of how two communities set up their MIS activities. They are not
intended to provide "models" for how an MIS should look, since every community
will tailor its MIS to its own needs and circumstances.

Further reading. This is one
of several FAO manuals that provide information to community groups working
broadly on forest management issues. A number of the other manuals in the series
complement this one and will be useful to groups working on marketing and
community participation in the management of NTFPs (see reading list at the end
of this manual).

FAO manuals are available through country or regional
representations throughout the world, often in several languages. Readers are
encouraged to contact their nearest FAO representative to find out how to obtain
FAO publications most easily in their area.

DEFINITIONS

The following list includes definitions of some of the
key terms used in marketing Information systems.

Markets are outlets for products and services. The
buyers may be either institutions or individuals. Markets can exist for raw
materials, semi-processed goods, finished products or services. They can be
local, regional, national or international.

Marketing involves "finding out what the customer
wants and helping to set up the production/marketing system that meets demand
and maximizes income" (FAO,1989). The marketing process includes the selection
and development of products and production processes, markets, pricing
strategies, packaging, distribution channels and methods, and advertising.

Marketing information is all the data that can help
those involved in production and sales identify the clients' needs and meet
those interests. This data concerns all aspects of the structure and operation
of the market. With this information, sellers can make better decisions about
marketing their produce. Specifically, producers might use marketing information
to determine what to produce and when to harvest or process a product. They
could calculate the returns depending on how much they process a product. And,
they could choose where and when to sell and decide how to package and
distribute their wares depending on what would provide the greatest profit.

Market
transparency refers to the amount of information a person has about the
entire production and sale chain of a certain good. If someone knows the entire
process of production and sale of a good from harvest to the consumer (including
costs and profits at each stage), then the market is "absolutely transparent" to
that person. Markets are more transparent when people have access to
information. Often, small producers lack information that others (such as
middlemen or exporters) may have. This puts them at a disadvantage in getting
the best price for their products. One purpose of an MIS is to increase market
transparency for small producers so that they can increase their power in the
marketplace.

A Marketing Information System (MIS) is a tool to
organize the collection, analysis and communication of marketing information. An
MIS should increase market transparency so that producers can market their
products more effectively and increase the profitability of their venture.

A Facilitator, as used in this manual, is a person
who helps stimulate a community's interest in creating an MIS and assists in its
efforts to design, operate and eventually expand the scope of their MIS
activities.

Agroforestry products are wood and non-wood
products from trees, shrubs or other woody perennials grown in agroforestry
systems (integrated systems in which woody perennials are grown in association
with crops and/or animals).

Non-timber forest products (NTFPs) is the term used
throughout this manual to describe a broader range of goods than those defined
as NWFPs. NTFPs can include small products made of ligneous (or woody)
materials, such as wooden stools, masks, drums or other handcrafted items which
are not industrial timber or pulp.

Non-wood
forest products (NWFPs) Non-wood forest products (NWFPs) are goods of
biological origin other than wood that are derived from forests. NWFPs also
include services, such as rope making and gum collecting, that are related to
the collection and processing of these products.

* Non-timber forest
products (NTFPs) is the term used throughout this manual to describe a broader
range of goods than those defined as non-wood forest products (NWFPs). NTFPs can
include small products made of ligneous (or woody) materials, such as wooden
stools, masks, drums or other handcrafted items which are not industrial timber
or pulp.